Operating at cost is part of the cooperative difference.When you signed up for electric service with Henry County Rural Electric Membership Corporation (HCREMC), you became a member of a not-for-profit electric cooperative. As a not-for-profit cooperative, HCREMC does not technically earn profits. Any revenues left over after covering our operating expenses are allocated back to our members. These allocations are called capital credits.
How Refunds Are Determined
The HCREMC board of directors evaluates the financial position of the cooperative annually. They determine whether to pay back capital credits (generally the third quarter of the year). Then, the board determines which capital credits from what year(s) will be refunded.
You Received a Check – What Happens If:
Simply write “return to sender” on the outside of the envelope, and it will be returned to HCREMC. Writing on the check that this person does not live at this address will direct us to update that account.
The check can be written in the heir’s name once the proper paperwork is on file with HCREMC. Please contact us at (800) 248-8413. You will need to fill out the proper paperwork. The heir will need a valid driver’s license and the original death certificate of the deceased.
Banks will not cash checks if they are in the name of a deceased individual. Please contact our office at (800) 248-8413 to fill out a capital credit request form. You will need a valid driver’s license and the original death certificate of the deceased party.
If an account is in a deceased person’s name, you must transfer the service to the new homeowner or tenant to continue service. Call our office at (800) 248-8413 to transfer the electric account, and we will rewrite the check.
Capital Credits Explanation Video
Capital Credits FAQs
When you sign up for an electric service from HCREMC, you become a member – and owner – of the cooperative. While investor-owned utilities return a portion of any profits (margins) back to their investors, electric cooperatives operate on a not-for-profit basis. So instead of returning profits (margins) to investors, REMC’s periodically retire capital credits.
Member-owned, not-for-profit electric utilities like Henry County REMC set rates to generate enough money to pay operating costs. At the end of each calendar year, we subtract operating expenses from the total amount of money collected during the year. The balance is called a “margin.”
Margins left over at the end of the year at a not-for-profit electric cooperative are allocated to the REMC members. Henry County REMC allocates margins to its members based on the quantity of kilowatt hours purchased. REMC keeps an accounting of each member’s share for each year.
Each year the Henry County REMC Board of Directors will make a decision on whether to retire capital credits and how much based on the financial health of the cooperative. Each year the Board of Directors will determine an amount to be designated in the yearly budget for the purpose of capital credit estate payments and general capital credit retirements.
A specific procedure has been put in place to assist you in claiming a capital credit for an estate. You may stop by the office and pick up an application package, download the application package below, or call (800) 248-8413 to request a package be mailed to your home. We are here to help!
You must be a legal heir and provide the proper documentation requested through the application process. Refunds will be processed on a first come, first served basis until the year’s budget has been depleted. Those applications received after the budget has been depleted will be processed in the order they were received when the next year’s budget begins.
Retention of Capital Credits is necessary to maintain an adequate financial position in any cooperative. Any refund of capital credits prior to 30 years will be discounted at a rate according to the current policy. Capital credits allocated more than 30 years ago will be refunded on a full “dollar for dollar” basis.
Henry County REMC’s goal is to retire a percentage of the oldest and newest capital credits remaining on our books each year. Financial conditions will determine when general retirements are made.
In most cases, your capital credit check is not taxable unless electricity is claimed as a business expense. We suggest that you consult with your tax advisor regarding the appropriate tax treatment of your individual capital credit check.
